BY GURDIAL SINGH NIJAR
(Deputy President, HAKAM)
IT’S hard to believe. That the government can conclude an agreement with a remarkable clause – foreign investors – usually big business companies – can sue our country for millions of dollars for defending our right to a clean environment and good health. The decision will be made by a secretive panel of corporate lawyers. They can bypass any ruling made to the contrary by the highest national court; and deny the will of Parliament and destroy the protection guaranteed by our Federal Constitution.
Welcome to the investor-state dispute settlement (ISDS) clause in the recently-concluded TPPA. Its devastating effect can be seen in many parts of the world – killing rules that protect the people and the living planet.
In Australia, the court decision validating the law to sell cigarettes in plain packets is being attacked by an action brought by the tobacco company supremo – Philip Morris – under an ISDS clause in a trade agreement between Australia and Hong Kong. This after it lost its challenge in the Australian apex court. An offshore tribunal is being asked to award a vast sum in compensation for the loss of what it calls its intellectual property.
Argentina was forced to pay out over a billion dollars in compensation to international utility companies – for freezing the high energy and water bills to protect its people.
In El Salvador, local communities achieved a victory for democracy after getting the government to refuse permission for a gold mine that would have contaminated the water system. But now the Canadian company owners are suing the government for US$315 million (RM1.34 billion) – for the loss of its anticipated future profits.
Canada itself is being sued for US$500 million by pharmaceutical company Eli Lilly for revoking its patent on the grounds that there is insufficient evidence of the beneficial effects it claimed. Lilly also wants the government to change its patent laws.
You see, these panels that decide the cases favour the investor. US corporations have reportedly yet to lose a case under a similarly worded ISDS clause. The three-member “judges” are in a revolving-door – corporate lawyers, many of whom have, or could in the future, act for these same big businesses.
The normal procedural safeguards of courts do not exist. The hearings are held in secret – with some minor concessions. Citizens and communities affected by their decisions have no legal standing. There is no right of appeal on the merits of the case. Yet these panels can overthrow the sovereignty of parliaments and the rulings of national courts.
Even these “panel judges” are amazed. As one of them disclosed: “It never ceases to amaze me that sovereign states have agreed to investment arbitration at all … Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”
So what has our government agreed to? The establishment of a private justice system for foreign corporations – with no protection against corporate greed!
And this ISDS clause is poised to subvert our laws – that protect the environment and people’s health. Bauxite mines? Hazardous factories? Foreign corporations will wave the threat of the ISDS clause if we dare touch them. And any new laws, or amendments to existing laws to protect the people, will simply be threatened out of existence.
Worse, Parliament’s wings will be clipped; its role to make beneficial laws severely crippled.
Is this the kind of system we wish for ourselves? Is not our judiciary insulted enough? The US says their investors need protection because our courts lack independence and are biased. Perhaps. But what kind of government readily accedes (in the international arena) to such a proposition?
Or is it to protect foreign corporations unsure how our courts could rule in a case where our people are pitted against them?
So they must be bypassed. A sovereign court system will be replaced with a questionable system riddled with conflicts of interest and arbitrary powers.
Now perhaps we can understand why the negotiations had to be held in secret. And we were never properly consulted in shaping an agreement which threatens our democratic fabric.
The arguments in favour have been demolished time and again. There will be no net trade benefits as the former UN assistant secretary-general for economic development, Jomo Sundram, has eloquently written recently. And this does not even begin to count the other seriously deleterious impacts – such as the access to affordable medicines.
This is certainly not a partisan issue. The real winners will be big foreign corporations. At the expense of the people and democracy.
Gurdial is professor at the Law Faculty, University of Malaya, and HAKAM Deputy President.